All the Real Estate News That’s Fit to RE-Print™
Welcome to our weekly edition of Real Estate Investing News This Week. Highlights this week include:
- Home-Price Gains Decelerate
- Home Prices Up 2.3% in Q2
- HUD’s July Housing Scoreboard: Mixed Results
- Freddie Mac: Economy Getting Back to Normal
- And more..
We hope these real estate news items help you stay up-to-date with your real estate investing strategies and inspire some profitable real estate deals for you.
According to the latest quarterly report by the National Association of Realtors®, home-price growth continued to moderate in many metropolitan areas in the second quarter and national year-over-year price appreciation is now at its slowest pace since 2012.
There were fewer rising markets in the second quarter compared to the first quarter, when price increases were recorded in 74 percent of metro areas.
Lawrence Yun, NAR chief economist, says price increases are balancing out to the benefit for both buyers and sellers. “National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth.”
The national median existing single-family home price in the second quarter was up 4.4 percent from a year earlier. The median price during the first quarter of 2014 rose 8.3 percent from a year earlier.
Despite continued signs of moderation in home price appreciation, the latest FNC Residential Price Index™ (RPI) shows that U.S. home prices were up another 0.8% from May to June and 2.3% throughout the second quarter.
Constructed to gauge the price movement among normal home sales by excluding distressed properties, the index’s year-over-year growth continues to decelerate as widely expected: down to 8.0% from its fastest acceleration of 9.4% in February 2014.
On Tuesday, the U.S. Department of Housing and Urban Development (HUD) released the July edition of the Housing Scorecard—a comprehensive report on the nation’s housing market. The latest data show progress among key indicators, including rebound in the sale of existing homes and the continuing downward trend of foreclosure starts and completions.
“The market indicators for the housing market recovery were mixed in July as foreclosure filings continue to improve, but home sales, particularly for new homes, showed unexpected weakness,” said HUD Assistant Secretary for Policy Development and Research Katherine O’Regan.”
Key Findings From The July Housing Scorecard:
- Sales of previously owned (existing) homes rose for the third consecutive month in June after a lackluster performance in the previous two quarters.
- Foreclosure starts and completions continue their downward trend.
- House prices appreciate in May while year-over-year gains continue to slow.
- Sales of new homes fell in June and sales in May were revised sharply downward.
On Wednesday, Freddie Mac released its U.S. Economic and Housing Market Outlook for August showing the country getting back to a more normalized economy, and therefore expecting to see housing driven once again by fundamentals.
- After several years of weakness we are starting to see the labor market pick up steam having added 230,000 net new jobs on average for the first seven months of this year.
- The monthly mortgage payment-to-rent ratio for the U.S. is near the lowest it has been in more than 35 years. Thus, even with some increase in house prices and interest rates, the ratio will remain relatively low.
- Latest forecast has economic growth averaging 3.3 percent in 2015 and the unemployment rate continuing to gradually decline.
Frank Nothaft, Freddie Mac vice president and chief economist, stated: “We are getting closer to a more normalized economy, and now we are expecting to see housing driven by fundamentals, and in fact, we’ve already seen this in some markets.”
On Thursday, RealtyTrac® released its U.S. Foreclosure Market Report™ for July 2014, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 109,434 U.S. properties in July, an increase of 2 percent from the previous month but still down 16 percent from a year ago.
Other findings from the report:
- A total of 49,624 U.S. properties started the foreclosure process for the first time in July, a 5 percent increase from the previous month, but still down 18 percent from a year ago — the 24th consecutive month with a year-over-year decrease in U.S. foreclosure starts.
- Despite the annual decrease nationally, foreclosure starts increased from a year ago in 14 states, including Nevada (up 128 percent), Texas (up 29 percent), New York (up 17 percent), Massachusetts (up 12 percent), and Michigan (up 6 percent).
- A total of 51,595 U.S. properties were scheduled for foreclosure auction in July, up 10 percent from the previous month but still down 3 percent from a year ago.
- Despite the annual decrease nationally, scheduled foreclosure auctions increased from a year ago in 20 states, including New Jersey (up 105 percent), Oregon (up 50 percent), Louisiana (up 32 percent), Utah (up 30 percent), Connecticut (up 18 percent), and New York (up 16 percent).
- A total of 25,937 U.S. properties were repossessed by lenders via foreclosure (REO) in July, down 4 percent from the previous month and down 30 percent from a year ago to the lowest level since April 2007.
- Despite the decrease nationally, bank repossessions increased from a year ago in seven states, including Maryland (up 77 percent), California (up 22 percent), Oregon (up 13 percent), and New Jersey (up 12 percent).
According to Corelogic, home prices nationwide, including distressed sales, increased 7.5 percent in June 2014 compared to June 2013.
This change represents 28 months of consecutive year-over-year increases in home prices nationally.
Excluding distressed sales, home prices nationally increased 6.9 percent in June 2014 compared to June 2013.
Highlights as of June 2014:
- Including distressed sales, the five states with the highest home price appreciation were: Michigan (+11.5 percent), California (+11.3 percent), Nevada (+11.1 percent), Hawaii (+10.8 percent) and Oregon (+9.5 percent).
- Excluding distressed sales, the five states with the highest home price appreciation were: Massachusetts (+11.2 percent), New York (+9.8 percent), Hawaii (+9.2 percent), California (+9.1 percent) and Oregon (+8.8 percent).
- Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to June 2014) was -12.9 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -9.0 percent.
- Including distressed sales, the U.S. has experienced 28 consecutive months of year-over-year increases; however, the national average is no longer posting double-digit increases.